The Value of Estate Planning: Regardless of Your Wealth

Joshua Dobi |

When the topic of estate planning arises, it’s common to associate it with affluent families like the Kennedys. However, it’s crucial to recognize that everyone has an estate, regardless of their wealth. The Internal Revenue Service (IRS) and individual state regulations acknowledge this fact. At North Main Financial, we believe that having an estate strategy is essential for everyone, as it ensures your future wishes are met after you pass away. Let’s explore why estate planning holds universal importance, regardless of your financial standing.


Estate Planning Beyond the Wealthy

Estate planning encompasses a wide array of strategies and considerations that extend far beyond writing a will. While it may seem complex, it’s essential to remember that your estate plan can be as simple or as comprehensive as your unique circumstances require. Here’s what you should contemplate when thinking about your estate planning:


  • Gifting and Taxes: If you intend to pass on assets or monetary gifts to family or friends, there are tax implications to consider. For instance, the IRS imposes a gift tax on cash gifts exceeding a certain amount, and those amounts differ depending on whether you are an individual or a married couple. Charitably inclined individuals can explore tax-efficient ways to donate assets to qualified 5019(c)(3) organizations, potentially receiving double tax benefits. Consulting a financial planner or tax advisor is wise when navigating the intricacies of gifting.


Utilizing Life Insurance

Life insurance can serve as a powerful tool in estate planning, offering tax-efficient ways to enhance or replace assets. Here’s how life insurance can play a role in your estate strategy:


  • Asset Replacement: Suppose you foresee using a portion of your assets during your retirement years. In that case, you can acquire a life insurance policy to replace the value of these assets. Upon your passing, your beneficiary will receive the insurance payout, ensuring they inherit the remaining assets in your portfolio. Correctly structured life insurance policies can be both income-tax and estate-tax-free.

  • Long-Term Care Considerations: If you anticipate needing long-term care or nursing home care that may deplete your assets rapidly, life insurance can act as a safeguard. By securing a life insurance policy, your beneficiaries can receive your assets in a tax-efficient manner when you pass away.


Business Succession Planning

Business owners should consider business succession planning as an integral part of their estate strategy. The specifics of your plan will depend on your business structure and value. Here’s what to think about:


  • Business Valuation:  Determine the objective value of your business, particularly if it exceeds the federal estate tax exemption amount. A professional evaluation is crucial to navigate potential tax implications accurately.

  • Sale Strategy:  Consider how you plan to sell or transition your business, whether during your lifetime or after your passing. Different approaches can lead to varying tax consequences, including income tax and estate tax ramifications. Engage professionals well-versed in business valuation, income tax, and estate tax preparation to guide you through the process.


While a will is a critical component of estate planning, it represents only one piece of the puzzle. Estate planning encompasses a broader spectrum of strategies that should align with your financial goals and aspirations. When dealing with topics like asset gifting, life insurance, and business succession, the potential tax implications are significant and can often be mitigated with careful planning and professional guidance. Whether you have substantial wealth or modest assets, estate planning is a proactive step to secure your legacy and ensure your wishes are fulfilled.

If you have questions about your financial space, give us a call at (704) 987-1425 or pay a virtual visit to our domain, If you wish to schedule an introductory meeting, we would be happy to meet with you at no cost or obligation to you.

These Blogs are provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Osaic Financial.